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Liberals and conservatives do not agree with each other, as a
matter of general principle. If one side says something is true,
then the other side will try hard to prove it isn’t, just to show
them. So it is nice to see liberals come around on a point
conservatives have been making for decades: Welfare leads to moral
rot.

Conservatives have made this point over and over again, in books
and conferences and blog postings ad nauseam. Twenty years ago
David Frum, a former speechwriter for George W. Bush, wrote that
“without welfare and food stamps, poor people would cling harder to
working-class respectability than they do now.” A couple of years
ago Paul Ryan made the same point: “We don’t want to turn the
safety net into a hammock that lulls able-bodied people to lives of
dependency and complacency, that drains them of their will and
their incentive to make the most of their lives.”

By giving people their daily bread, conservatives say, the
welfare state robs them of any reason to get off the couch and make
it themselves. And this is bad not just because it imposes economic
costs on society. It is bad because it corrodes virtue. Industry,
thrift, a go-getter spirit—these are important qualities in both
the individual and the community. Laziness, sloth, dependence on
others—these are character flaws. Those on welfare could go to work
and do for themselves, conservatives say, if only the welfare state
hadn’t enabled them not to.

Liberals think this is all bunk. While some, such as economist
Paul Krugman, might concede that “incentives do have some effect on
work effort,” they contend the effect is quite small. What’s more,
they say conservatives get the causality backward. People receive
government benefits because they are poor, and they are poor
because of economic circumstances. They aren’t poor because of
government benefits.

Or so they used to say. But then came Walmart.

A couple of weeks ago Walmart announced it would raise hourly
wages for half a million employees. The New York Times
argued it should be forced to raise pay even further through an
increase in the national minimum wage. After all, the paper said,
there is “little doubt that Walmart (and other employers) would pay
more if low wages were not, in effect, subsidized by taxpayers, who
pay for the food stamps and other public assistance that low-wage
workers rely on to get by.”

The Times was referring to a study, such as it was,
purporting to show Walmart’s low wages cost taxpayers $6.2 billion
in public assistance, including food stamps, Medicaid, and housing
benefits. Other studies have purported to show similar things about
the fast-food industry—which ostensibly costs the taxpayers $7
billion in social-welfare spending.

These tendentious claims have several shortcomings, such as
loaded assumptions (PolitiFact has ruled a similar claim,
by an MSNBC figure, “mostly false”) and the fact that a slightly
smaller percentage of Walmart’s workforce receives public benefits
than the average for the U.S. retail sector as a whole.

Imagine, too, what would happen if Walmart and fast-food
restaurants went out of business tomorrow. Would other companies
snap up all their employees, perhaps even pay them better? Probably
not. (In fact, the increase in job applicants might depress wages
elsewhere.) It is far more likely that the shutdowns would lead to
higher unemployment and therefore even more social-welfare
spending. Hence Walmart and other low-wage employers probably
reduce the total amount of social-welfare spending in the U.S.,
rather than increase it.

But forget all that. Assume the company’s critics are right—that
Walmart is leaning on public assistance to avoid pay hikes it
otherwise would have to make. The criticism here isn’t simply an
economic one. It’s also a moral one.

Greed, stinginess, lack of compassion—those qualities that
supposedly produce Walmart’s low wages—are character flaws. Indeed,
one of the groups criticizing Walmart’s pay scales is Americans for
Tax Fairness—and fairness is a question of moral judgment. Another
left-leaning group, Demos, lamented in a report on raising Walmart
pay that “American workers are working harder for less” even as the
rich get richer. Walmart, says The American Prospect,
creates “an America where millions of people who get up and go to
work each day are nevertheless paid too little to feed
themselves.”

You get the idea: Walmart has a moral obligation to pay its
workers more—and it would, if not for all the food stamps, housing
assistance and medical benefits those workers receive from the
federal government.

What is this but the conservative welfare critique applied to a
different party? It’s not economic circumstances that have led to
Walmart’s low wages, but moral shortcomings. Government assistance
has lulled an able-bodied company into dependency and complacency,
draining it of the will and the incentive to do the right thing for
its workers.

The two arguments continue running in parallel. Conservatives
argue that poor people would be better off in the long run if they
took even menial jobs, and thereby started to develop the habits of
character that are essential for anyone who wishes to prosper.

Liberals argue that Walmart and other low-wage companies would
be better off if they paid workers more. As Demos argued two years
ago: “Walmart . . . workers earn too little to generate the
consumer demand that supports hiring and would lead to economic
recovery. . . . If Walmart redirected its current spending to
invest in its workforce, the benefits would extend to all
stake-holders in the company—customers, stockholders, taxpayers,
employees and their families—and the economy as a whole.”

Conservatives used such arguments to push through welfare
reform, forcing recipients to seek the jobs right-wingers felt they
needed for their own good. And as the Times put it the
other day about Walmart’s recent wage announcement, “Walmart can
readily afford to do better than those measly increases. But it is
very unlikely to do that voluntarily, without government
action.”

By government action, the paper meant raising the minimum wage,
not cutting welfare. But be thankful for small favors: At least
some progressives are beginning to admit there’s a problem.

This week, the Supreme Court will hear oral arguments in King v. Burwell, one of four legal challenges to an IRS regulation that purports to implement the Patient Protection and Affordable Care Act, but in fact vastly expands the IRS’s powers beyond the limits imposed by the Act. Just in time for oral arguments before the Court, Vox’s Sarah Kliff has produced what I think may be the best history of King v. Burwell and related cases I’ve seen. Still, there are a few important errors and omissions, listed here in rough order of importance.

1. Kliff refers to the birth of my “twin daughters.”

My wife indeed gave birth to twins, but only one of them was a girl.

Definitely not a girl.

2. The twins’ birth did not cut into my efforts to dissuade states from establishing Exchanges.

They were born after the deadline for states setting up Exchanges had passed.

3. “As anyone who covered it at the time…remembers, the law’s passage was an absolute mess,” Kliff reports, and the “messy language and loose ends that legislators expected to get ironed out simply became part of the law.”

Nevertheless, Kliff reports that all congressional staff involved with the drafting of the Patient Protection and Affordable Care Act swear they meant to authorize the disputed taxes and subsidies in states with federal Exchanges. She also reports that all journalists who reported on the drafting process swear that every time the topic arose, Democratic staffers always said these provisions would be authorized in states with federal Exchanges. (Well, except these members of Congress and this journalist.)

Kliff neglects to mention that there is absolutely zero contemporaneous evidence of any kind that supports those recollections. Or that contemporaneous discussions of that issue, like this one by Jonathan Cohn, show (A) that even the sharpest journalists weren’t paying attention to this issue, and (B) to the extent they did, their impressions were consistent with the subsidies being conditional.

Thus, the only contemporaneous evidence that speaks directly to the question presented to the Court is the explicit statutory text clearly limiting subsidies to Exchanges “established by the State.” That’s probably something Kliff should have mentioned. You know, so readers can decide whether to take the “if you like your health plan, you can keep it” crowd at their word.

4. According to Kliff, in August 2011, Jonathan Adler suggested to me that the ACA only authorizes subsidies through state-established Exchanges and suggested I fold that into the case I was making to state officials that they not implement the ACA.

Hey, wait a minute. The first part is true, but the second part is not. I didn’t need that Adler guy to tell me how to do my job. I needed him to tell me how to do his job.

5. Kliff commits the same rookie (or Freudian?) error every other reporter does by claiming the disputed taxes and subsidies are part of ObamaCare, that a victory for the government is a victory for the ACA, and to rule for the plaintiffs would be “to rule against the Affordable Care Act.”

That is the government’s argument, which Kliff treats as fact. The plaintiffs argument is that they are trying to uphold the law. The two lower court opinions that went against the government said they wereupholding the ACA.

By framing the case the way the Obama administration does, Kliff is essentially winking at her readers as if to say, ‘Natch, the government is right.

6. Kliff quotes former Democratic staff director of the Senate Health, Education, Labor, and Pensions (HELP) Committee John McDonough as saying, “There is not a scintilla of evidence that the Democratic lawmakers who designed the law intended to deny subsidies to any state.”

That is flatly untrue.

As even the government concedes, the Democratic senators on the HELP Committee—which McDonough ran—approved a bill that withheld Exchange subsidies in states that did not implement that bill. Kliff has quoted McDonough in the past making the same invalid point, and I have corrected her, to no avail.

Kliff should have informed readers that McDonough himself helped the authors of the ACA do what he now says they never considered doing. Instead, she once again allowed McDonough to misrepresent the legislative history and what the ACA’s authors were considering.

7. Kliff leaves the reader with the impression that the statutory requirement that subsidy recipients must enroll “through an Exchange established by the State”—the only language in the statute that speaks directly to the question presented in King v. Burwell—was a “drafting error.”

8. Kliff reports that Adler told me in August 2011 that the ACA offered Exchange subsidies only in state-established Exchanges, but: “There wasn’t much that Cannon and Adler could do with their discovery at that point. The federal government still hadn’t published the rules governing how the insurance subsidies would work; it was still possible that the Obama administration might come out and agree with them, saying state exchanges were the only bodies authorized to dole out funds. The Obama administration eliminated that possibility in May 2012.”

Actually, the Obama administration announced its plan to issue subsidies in federal Exchanges almost immediately after Adler told me they couldn’t. The IRS issued its proposed tax-credit rule in mid-August 2011.

Having read the law, that was not what I expected. Call me naïve, but I was surprised the IRS was violating clear statutory text.

10. Kliff writes, “The whole point of the federal exchanges, after all, was to make sure Obamacare worked in states that wouldn’t or couldn’t build an exchange of their own.”

How does Kliff know that? This is an assumption, which she appears to make without any contemporaneous support.

I don’t know how Kliff rules out Vanderbilt law professor Jim Blumstein’s alternative theory that the federal Exchanges were nothing more than an “oops” provision to protect the ACA against charges that Congress was commandeering the states. I hope she has more to go on than assurances from the “if you like your health plan, you can keep it” crowd.

Between Kliff’s theory and Blumstein’s theory, the latter is more compatible with the ACA, which explicitly authorized unlimited funds for the establishment of state-run Exchanges but zero funds for the establishment of federal Exchanges.

11. Kliff writes: “Congress always meant for residents of all 50 states to have access to financial help. It was never a question, during the five years I’ve spent writing about Obamacare, whether this would be the case.”

Regarding the first claim, Congress also meant for residents of all 50 states to have access to the ACA’s Medicaid expansion. That doesn’t mean Congress didn’t intend to condition Medicaid subsidies on state cooperation.

Regarding the second claim, all that tells us is that journalists should ask more questions and/or members of Congress and congressional staff should read bills more closely.

12. Kliff writes, “For about two years, [Adler, Cannon,] and other challengers made a purely textualist argument.”

Actually, it was less than one year before we learned the plain text of the statute reflected Congress’ intent. We wrote in July 2012: “We were both surprised to discover this flaw in the law, and characterized it as a ‘glitch.’ Yet our further research demonstrates this feature of the law was intentional and purposeful, and that the IRS’s rule has no basis in law. This supposed fix is actually an effort to rewrite the law and provide for something Congress never enacted, and indeed that PPACA’s authors intentionally chose not to include in the law.”

Fortunately, to her and Vox’s credit, she let me make that case in my own words in a previously published interview (read the whole thing):

Sarah Kliff: Are you 100 percent convinced it was Congress’s intent to withhold subsidies in the federal exchange?

Michael Cannon: There are two ways to interpret that question. Did the people who wrote this language mean to withhold subsidies in federal exchanges? My answer to that is, I’m 100 percent convinced that they meant to do that.

The other way to think about it is, “Did the people who voted for this law intend to withhold subsidies in federal exchanges?” That’s a different question, but the answer is the same. I’m 100 percent convinced that’s what the members of Congress who enacted this law meant to do, just the same way I’m 100 percent convinced they meant to throw people off of their existing health plans even though they said, “If you like your health plan, you can keep it.”

What members of Congress might have ideally wanted is different from congressional intent, which is determined by what they actually vote on. If the language of a statute is clear, then that constitutes congressional intent.

14. Kliff writes that when Oklahoma became the first plaintiff to challenge the IRS rule, it “couldn’t scrounge up additional plaintiffs before the deadline to amend its case and ultimately went it alone.”

In fact, Oklahoma had additional plaintiffs lined up, but the court wouldn’t allow those plaintiffs to join the suit.

15. Kliff writes, “And on July 22, the subsidies argument got its first positive news. In the span of two hours — and by pure coincidence — the appeals courts for the District of Columbia and the Fourth Circuit issued conflicting rulings.” (Emphasis added.)

If Kliff can substantiate the claim that this was a coincidence, she should share it.

16. Kliff writes, “[Jonathan] Gruber has disavowed the remarks [in which he told audiences that the law conditions subsidies on states establishing Exchanges], saying that he spoke ‘off the cuff’ and made a mistake. There’s reason to believe him: Gruber spoke regularly to dozens of reporters during this period and never mentioned this idea to any of them.”

Kliff should have mentioned there is also reason not to believe Gruber’s disavowals. Gruber made that claim multiple times, and his attempts to explain those comments away reveal, um, inconsistencies.

17. Finally, Kliff writes that the government’s argument “has remained consistent throughout the process.”

No, it hasn’t. When King v. Burwell reached the Supreme Court, the government unveiled a new argument: “The phrase “Exchange established by the State under Section [1311] is a term of art that includes an Exchange established for the State by HHS.” The government also called the phrase a “technical term” that “reflects style and grammar—not a substantive limitation” on the IRS’s power.

The government had never previously called that phrase a “term of art.” The only statutory provision it had described as a term of art was the term “Exchange,” and the government described that as a “defined term of art” (emphasis added) because, unlike “Exchange established by the State,” the ACA actually bears a definition that gives the word “Exchange” a meaning other than its ordinary meaning.

–

I meant what I said at the beginning. This really was the best history of King v. Burwell and related litigation that I’ve seen.

Merck, the pharmaceutical giant, is facing a slew of controversies over its Measles-Mumps-Rubella (MMR) vaccine following numerous allegations of wrongdoing from different parties in the medical field, including two former Merck scientists-turned-whistleblowers. A third whistleblower, this one a scientist at the Centers for Disease Control, also promises to bring Merck grief following his confession of misconduct involving the same MMR vaccine.

The controversies will find Merck defending itself and its vaccine in at least two federal court cases after a U.S. District judge earlier this month threw out Merck's attempts at dismissal. Merck now faces federal charges of fraud from the whistleblowers, a vaccine competitor and doctors in New Jersey and New York. Merck could also need to defend itself in Congress: The staff of representative Bill Posey (R-Fla) -- a longstanding critic of the CDC interested in an alleged link between vaccines and autism -- is now reviewing some 1,000 documents that the CDC whistleblower turned over to them.

The first court case, United States v. Merck & Co., stems from claims by two former Merck scientists that Merck "fraudulently misled the government and omitted, concealed, and adulterated material information regarding the efficacy of its mumps vaccine in violation of the FCA [False Claims Act]."

According to the whistleblowers' court documents, Merck's misconduct was far-ranging: It "failed to disclose that its mumps vaccine was not as effective as Merck represented, (ii) used improper testing techniques, (iii) manipulated testing methodology, (iv) abandoned undesirable test results, (v) falsified test data, (vi) failed to adequately investigate and report the diminished efficacy of its mumps vaccine, (vii) falsely verified that each manufacturing lot of mumps vaccine would be as effective as identified in the labeling, (viii) falsely certified the accuracy of applications filed with the FDA, (ix) falsely certified compliance with the terms of the CDC purchase contract, (x) engaged in the fraud and concealment describe herein for the purpose of illegally monopolizing the U.S. market for mumps vaccine, (xi) mislabeled, misbranded, and falsely certified its mumps vaccine, and (xii) engaged in the other acts described herein to conceal the diminished efficacy of the vaccine the government was purchasing."

These fraudulent activities, say the whistleblowers, were designed to produce test results that would meet the FDA's requirement that the mumps vaccine was 95 per cent effective. To the whistleblowers' delight, the judge dismissed Merck's objections to the case proceeding, finding the whistleblowers had plausible grounds on all of the claims lodged against Merck.

Vaccine advocates, are you starting to find even a glimmering of understanding why some intelligent and well-informed people just might harbor the occasional doubt about the safety and efficacity of vaccines? If not yet, what more will it take? And do you not understand that once this level of fraud is established, it casts at least a modicum of doubt on EVERY SINGLE CLAIM that has been made about vaccine safety in the past?

Perhaps you'll even be able to understand why doctors have been hesitant to come forward with their doubts about vaccines if you consider the sort of response they can be expected to encounter from the vaccine manufacturers, who are legally protected against being held liable for the deficiencies of their products:

Merck made a "hit list" of doctors who criticized Vioxx, according to testimony in a Vioxx class action case in Australia. The list, emailed between Merck employees, contained doctors' names with the labels "neutralise," "neutralised" or "discredit" next to them.

You report that the IRS is cutting back on “customer service.” Pleading poverty because of the budget cuts it must endure as a result of Congressional displeasure with its recent mistreatment of many of its ‘customers,’ the IRS moans that it simply has too few resources now to adequately man its customer-service phone lines. The IRS’s message to its ‘customers’ is clear: tell your representatives to increase our funding or we’ll make your lives even more miserable than we already do.

There’s a key, if familiar, lesson here: when private firms in competitive markets seek more revenue they considerately offer customers the carrot of better service; in contrast, when government agencies seek more revenue they angrily whack ‘customers’ with the stick of worsened service.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Of course, there’s a real upside to this particular instance of bureaucratic greed: also predicted to fall in number are IRS audits.

Tomorrow at CPAC, I will discuss some advantages of infrastructure privatization. Perhaps the largest advantage is innovation. Unlike government bureaucracies, private firms in a competitive environment are eager to maximize the net returns of projects, so they find new ways to reduce costs and improve quality.

The benefits of innovation are obvious in fast-moving industries such as high-technology. But innovation can also be important in long-established, hard-hat industries such as highway building. Numerous countries are ahead of the United States in privatizing and partly privatizing (“public private partnerships” or “P3s”) government assets such as highways, airports, seaports, passenger rail, and air traffic control. Experience around the world shows that much innovation is possible after such industries are liberated from the bureaucratic yoke.

A House hearing last year looked at the international experience with privatization. The head of a provincial P3 agency in Canada said that P3 projects are more likely to be completed on time and on budget than traditional government infrastructure projects. And he said, “Competition and the profit motive can lead to startling results, where the winning proposal provides solutions that the public owner never contemplated. This happens over and over again.” Isn’t that interesting?

In his latest newsletter, Robert Poole provides more evidence of the “innovative effect” of P3s. He discusses $2 billion of cost savings from P3 highway projects in Texas, which are examined in a paper by Fidel Saenz de Ormijana and Nicolas Rubio:

Texas DOT has been gradually increasing the extent of design flexibility it gives project developers, via two methods. One is to encourage P3 developers to submit “alternative technical concepts” (ATCs) as part of their proposals in response to an RFP. The other is to encourage potential developers to present innovative ideas during the industry review meetings that precede issuance of the RFP. In the latter case, those ideas may be included in the RFP as options for all potential bidders to consider.

The largest cost savings discussed in the paper concern the LBJ (I-635) project in Dallas, where TxDOT’s conceptual design called for the express lanes to be constructed in a new tunnel beneath the existing general-purpose lanes, due to severe right of way constraints. During design review, the authors’ companies (Ferrovial and Cintra) suggested the alternative of a depressed center section for the express lanes, with the rebuilt general-purpose lanes partly cantilevered over the express lanes. This was presented in the RFP as an option, and the authors’ consortium’s bid that used this approach came in at substantially lower cost, contributing a large fraction of the resulting $1.3 billion construction cost savings.

The other cases described in the paper deal with several phases of the North Tarrant Express project in Fort Worth. In these cases, the developer-proposed changes were of two types. Some were changes in the design and placement of lanes and ramps, to provide better traffic flow (and generate more toll revenue). Others were changes in phasing, so as not to incur premature construction costs for lanes needed only in the ultimate configuration (10 to 20 years in the future), while designing now to facilitate their later addition within the long term of the concession agreement. These changes saved $480 million in NTE 1 and 2W and another $150 million in NTE 35W.

… By looking at the LBJ and NTE projects as businesses, the team was strongly motivated to come up with alternative designs and more-careful phasing of improvements to make the projects financially feasible. And to its great credit, Texas DOT was willing to accept many of those changes, resulting in projects that will provide very tangible benefits, without putting taxpayers at risk.

When I write about the dangers to innovation, competition, and price discovery from the FCC's decision to regulate the Internet into Ma Bell, supporters of net neutering are quick to point out that the FCC promised to only use a fraction of the power it is giving itself.

Ha! When has this happened, ever, with the government? If they have the power, they are going to use it. In fact, to call the FCC as somehow careful about staying within bounds of their power is a joke anyway, since this entire regulation likely exceeds their legislative mandate. Even if the current commissioners are honest that they will never use all this new power, how can they possibly bind future commissioners?

when initially imposed, the income tax, despite its progressive rates, appeared rather straightforward and not all that burdensome—almost benign. Of course, appearances can be deceiving.

There were, of course, warnings about the dangers of a progressive tax structure. But people supported the income tax because it was originally meant to impose only very low tax rates on only the highest incomes. Proponents argued that the 16th amendment to the U.S. Constitution would force the so-called “robber barons” to pay taxes. It was not supposed to provide a mechanism for Washington to reach into most Americans’ pockets.

...

The original income tax was obviously not meant to be paid by most citizens, nor were rates high enough to significantly undermine the spirit of enterprise. For example, under this system single taxpayers today would pay no tax on any earnings up to almost $45,000 and married couples on earnings up to almost $60,000. A one percent tax rate would be in effect on incomes up to about $300,000. The top rate of 7 percent would not take hold until earnings hit almost $7.5 million.

* "Net Neutrality" is an Orwellian term that bears no relationship to what is actually going on. I will use "net neutering" going forward.

Most of the discussions on income inequality, the reviled “top 1%,” and the hand-wringing about the share of income or wealth going to the “top 1%” typically assume that the top 1/5/10% and bottom 99/95/90% percentile groups by income (pick your favorite percentage) operate like private clubs that are closed to new members. That is, many people assume that various income groups are static and fixed, with very little movement or fluidity among those income groups over one’s career or lifetime. Start out life in the bottom 20% or bottom 50%? Too bad, you’re stuck there forever no matter how hard you try or work, and you can forget about ever being part of the top 1/5/10%. Born into the top 1/5/20%? Great, you’ve got a lifetime membership in that static, closed group.

That rather simplistic interpretation of a static economy is really nothing like the very fluid and dynamic world we actually live in, with significant degrees of income and wealth mobility/fluidity over one’s lifetime. That’s the main conclusion of a new study titled “The Life Course Dynamics of Affluence” by Thomas Hirschl and Mark Rank, based on an empirical investigation of individual lifetime income data in the Panel Study of Income Dynamics over a 44-year period.

For example, one of the authors’ key findings is that by age 60, nearly 70% of the US population experienced at least one year in the top 20% by income, more than half (53.1%) were in the top 10% for at least one year, more than one-third (36.4%) spent at least one year in the top 5%, and 11.1% (one out of nine) spent at least one year with income in the top 1% (see top chart above). Those findings of significant income fluidity for one year periods are further supported when the authors look at longer time periods. For example, although 11.1% of Americans made it into the top 1% for at least one year, only 1.1% (1 in 91) of Americans stayed in the top 1% for ten years or more during their lifetimes, and only about half that amount (0.60%, or 1 in 167) were able to stay in the top 1% for ten consecutive years (see bottom chart above). That should shatter the myth that the top 1% is a fixed club closed to new members! Likewise, more than 1 out of 3 Americans (36.4%) spent at least a year in the top 5%, but only about 1 in 15 (6.6%) remained there for ten years or more, and only about 1 in 27 (3.7%) spent 10 consecutive years in the top 5%. Lots of movement and fluidity.

Here is a summary of the main findings of the study (emphasis added):

1. There is substantial fluidity in top-level income over ages 25 to 60. Thus a static image of top-level income tenure is at odds with the empirics of how people live out their life course.

2. The study findings indicate that top-level income categories are heterogeneous with respect to time, comprised of a relatively small set of persistent members, and a larger set of short-term members. For example, although over half of the U.S. population experienced one or more years of top 10th percentile income, only about half of this set attained top 10th percentile income for three consecutive years, and fewer than 7 percent persisted at this level for 10 consecutive years. Thus the lifetime top 10th percentile is mostly transitory, moving in and out of this percentile over the life course.

3. There are two contentious social implications related to the finding that top-level income is fluid across time. One is that there is widespread opportunity for top-level income. The opportunity to attain top-level income is widely accessed, and many reap the benefits of opportunity. It is also the case that attaining top-level income in one year does not necessarily predict it for the following year. Indeed, most who attain top-level income do so for a limited number of years, and to the extent that they have expectations of persistence, have some probability of experiencing insecurity relative to their expectations. Income fluidity is a double-edged sword, creating opportunity for many, along with insecurity that this opportunity may end sooner than hoped for.

4. We interpret the widespread attainment of top-level income as materially consistent with the way the majority of Americans tend to characterize their society. In a recently published study, we report evidence that most Americans hold fast to the belief that hard work will be rewarded economically, and the present study finds evidence that many Americans do, in fact, attain top-level income. This evidence is counter-intuitive vis-à-vis popular interpretations regarding the 1 percent versus the 99 percent, and we believe that our findings serve to qualify these interpretations. When interpreting social and economic relationships and trends, it is important to consider not simply one, or even many, cross-sections in time, but also the extent of social and economic mobility across the life course. Individuals experience their lives not as a disconnected set of years, but rather as a continuous lifetime of experience.

MP: Thanks to Thomas Hirschl and Mark Rank for bringing some much-needed attention to the significant income mobility and fluidity in the American economy, which directly contradicts the narrative we hear all the time of a rigid class structure based on static income groups like the top 1/5/10%, a static bottom 20/50/99%, etc.

As one of the authors (Mark Rank) pointed out last year in the New York Times:

It is clear that the image of a static 1 and 99 percent is largely incorrect. The majority of Americans will experience at least one year of affluence at some point during their working careers. (This is just as true at the bottom of the income distribution scale, where 54 percent of Americans will experience poverty or near poverty at least once between the ages of 25 and 60).

Ultimately, this information casts serious doubt on the notion of a rigid class structure in the United States based upon income. It suggests that the United States is indeed a land of opportunity, that the American dream is still possible — but that it is also a land of widespread poverty. And rather than being a place of static, income-based social tiers, America is a place where a large majority of people will experience either wealth or poverty — or both — during their lifetimes.

Rather than talking about the 1 percent and the 99 percent as if they were forever fixed, it would make much more sense to talk about the fact that Americans are likely to be exposed to both prosperity and poverty during their lives, and to shape our policies accordingly. As such, we have much more in common with one another than we dare to realize.

Here is the letter I wrote today (pdf) to Representative Grijalva confessing my climate funding biases. The image is below. I feel so much better.

I wrote this in support particularly of Roger Pielke, who has educated a lot of people about climate and is not even really a climate skeptic and who has been pretty upset by this scrutiny. Call it the "I am Spartacus" strategy.

Some asshole
turned off the 21st century in northern Arizona yesterday. The
hardest part was probably the hike. The modern world flows to
northern Arizona in a cable that runs hundreds of miles through the
desert. That cable was cut in an
isolated river bed near New River, north of Phoenix. Once the
vandals were there, doing damage wasn't that big a challenge. The
cable is about as thick through as a man's leg, so the right tool
in a backpack was all it took. And there went the 21st century, and
maybe a few illusions some of us (**cough**) may have about the
extent of our independence.

What went with that cable was most cell phone service (every
company but Verizon was down), the Internet (multiple ISPs run
through the same pipe), the 911 system, and pretty much any digital
communications connection you can imagine. Northern Arizona
businesses largely became cash only—including the roadside stops
vending gas to cross-country travelers. Trucks lined up waiting for
the stations to get back online so they could process company
credit cards to fill their tanks. It's not like the drivers could
just take out cash—ATMs were down, too.

My wife's pediatric office was able to examine kids and patch
them up. But checking on test results, getting reads on x-rays,
scheduling appointments with specialists, and electronically
sending prescriptions to pharmacies were all out. Old-fashioned
landlines worked, but medical facilities are part of the modern
world. Thoroughly digitized and electronic, hospitals, labs, and
clinics were reduced to sending couriers back and forth.

There's a lot to like about the interconnected, digitized modern
world. I wouldn't be telecommuting from a rural area if I didn't
have an electronic link to the world beyond. People like me now
have the historical luxury of living where we want while doing work
that, not so long ago, required an actual presence in a major
population center.

But that means we need that electronic link. I thought I was
being clever by using a smart phone hotspot as a backup for
occasional Internet outages. Unfortunately, for much of its
journey, the conduit for my smart phone runs all of two inches from
the main Internet connection. Live and learn.

The outage inconvenienced me. Some folks who've grown up in the
wired age had a worse time of it. According to
CBS 5, "Zak Holland, who works at a computer store at Northern
Arizona University, said distraught students were nearly in tears
when he said nothing could be done to restore their Internet
connection."

Northern Arizona is sparsely settled, which likely explains its
weak connection to the modern age. Fiber optic is
pricey to lay down per mile, and there's only so much of it
that any company can afford to run across the wilderness to serve a
scattered population. We get our 3G, but we have to live with the
fact that somebody with a
grudge, hiking boots, and a spade can take it away.

That's a reality check for those of us who value our
independence. I use the Internet to liberate me from places I don't
want to live, governed by politicians I don't like, who impose laws
I find intrusive. But in the process, I make myself dependent on a
six-inch-wide pipe.

So now, to ensure a bit more of that that independence I thought
I had, I have to work a bit harder on that backup plan.

In ED … Smith argued that the colonies dealing in sugar and tobacco could only afford slave labour because of the ‘exhorbitancy of their profites’ [sic] arising from the monopoly of the fro trades. He added that ‘the planter in the more northern colonies, cultivating chiefly wheat and Indian corn, by which they expect no such exhorbitant returns, find it not for their interest to employ many slaves, and yet Pennsilvania, the Jerseys and some of the Provinces of New England are much richer and more populous than Virginia, notwithstanding that tobacco is, by its ordinary high price a more profitable cultivation.’

So – insofar as Smith is here correct – slavery thrived because of restrictions on free markets and was not itself a fuel for free markets.

(This editors’ footnote does not appear in the on-line version of The Wealth of Nations linked to here.)

You can now get your hands on the digital edition of Brandon Sanderson's Warbreaker for only 2.99$ here.

Here's the blurb:

After bursting onto the fantasy scene with his acclaimed debut novel, Elantris, and following up with his blockbuster Mistborn trilogy, Brandon Sanderson proves again that he is today's leading master of what Tolkien called "secondary creation," the invention of whole worlds, complete with magics and myths all their own.Warbreaker is the story of two sisters, who happen to be princesses, the God King one of them has to marry, the lesser god who doesn't like his job, and the immortal who's still trying to undo the mistakes he made hundreds of years ago.Their world is one in which those who die in glory return as gods to live confined to a pantheon in Hallandren's capital city and where a power known as BioChromatic magic is based on an essence known as breath that can only be collected one unit at a time from individual people.By using breath and drawing upon the color in everyday objects, all manner of miracles and mischief can be accomplished. It will take considerable quantities of each to resolve all the challenges facing Vivenna and Siri, princesses of Idris; Susebron the God King; Lightsong, reluctant god of bravery, and mysterious Vasher, the Warbreaker.

A broken door. Smashed windows. Residue from a
flesh grenade on the carpet. That's the state in which Miami cops
left a 90-year-old woman's house after raiding it for drugs. They
didn't find any illegal activity, but won't admit they made a
mistake.

The woman was interviewed by
cbsmiami.com, though she declined to be named. She said the
raid happened on December 18th:

“I don’t know how the cops got in here. The noise woke me up
when something said boom! Like a bomb or something,” said the
90-year old. ...

Riviera Beach Police said after evidence of criminal activity,
they got a search warrant.

“Cops standing over here talking about where’s the drugs? I said
what? What drugs? Ain’t no drugs in here,” she said.

After drug-sniffing dogs failed to find anything, the police
left. When asked whether they got the wrong address, the department
countered that just because the woman didn't know about drugs being
sold out of her house "doesn't mean it didn't happen." That ranks
pretty highly on the list of hilarious and also worrisome police
excuses, in my book.

The cops have agreed to repair the damages to her house, at
least—though they have not done so yet.

Dave Maass, over at EFF, has an absolutely insane story about how the South Carolina Department of Corrections (SCDC) added a special new level 1 felony charge (for reference: murder, rape, rioting and hostage-taking are all level 1 felonies) for... using a social network while in prison. Yes, these individuals are already prisoners, but this draconian law and even more draconian enforcement means that hundreds of South Carolina prisons are facing extended sentences and long stays in solitary confinement for... posting to their Facebook page. And that's not an exaggeration:

In October 2013, Tyheem Henry received 13,680 days (37.5 years) in disciplinary detention and lost 27,360 days (74 years) worth of telephone, visitation, and canteen privileges, and 69 days of good time—all for 38 posts on Facebook.

In June 2014, Walter Brown received 12,600 days (34.5 years) in disciplinary detention and lost 25,200 days (69 years) in telephone, visitation, and canteen privileges, and 875 days (2.4 years) of good time—all for 35 posts on Facebook.

In May 2014, Jonathan McClain received 9,000 days (24.6 years) in disciplinary detention and lost 18,000 days (49 years) in telephone, visitation, and canteen privileges, and 30 days of good time—all for 25 posts on Facebook.

Why so harsh? The SCDC says that it's a separate felony for each day that an inmate uses a social media site (oddly, you can do as much as you want in a single day and it's just a single felony -- but new day, new felony). And, of course, "social media" is defined broadly as well:

South Carolina adopted a Level 1 social media offense [PDF] to punish “Creating and/or Assisting With A Social Networking Site,” defined as: “The facilitation, conspiracy, aiding, abetting in the creation or updating of an Internet web site or social networking site.”

SCDC defines “social networking” very broadly, covering everything from YouTube and Twitter to blogs and email, although all of the cases EFF reviewed [PDF] involved Facebook. Investigations are conducted by corrections officers and inmates are convicted during disciplinary hearings that often last mere minutes.

Since the policy was implemented, SCDC has brought 432 disciplinary cases against 397 inmates, with more than 40 inmates receiving more than two years in solitary confinement [PDF].

There's a lot more to Maass's article, and it's well worth reading. He also takes Facebook to task for helping the SCDC takedown prisoners' Facebook profiles. Facebook has set up an easy form, which can lead to widespread abuse, and it doesn't appear that Facebook does much, if anything, to check to see if the accounts actually abuse the company's terms of service. There are lots of problems with the criminal justice and prison systems in the US, and there may be legitimate reasons to limit access to social media for prisoners (though that seems like a stretch in many cases). But to make it an additional felony and to lock up people for years because of it? How is that not cruel and unusual punishment?

I am not confused about the Greek desire to get out from under their debt load - past governments have built up intolerable levels of debt which is costs a huge portion of Greek GDP to pay off.

At one time in my life I would have been confused by folks, often on the Left, who argue that the answer to Greek debt problems is ... deficit spending. This might have seen inexplicable to me earlier in life as a wondered how the same behavior of fiscal irresponsibility that led them into debt would get them out. But I have learned that there is no limit to the optimism Keynesians hold for the effects of government spending. The last trillion of debt may have not done anything measurable but the next trillion is always going to be the one that turns us around. Sort of like Cubs fans.

No, what confuses me today is the fact that other institutions and countries are still willing to buy Greek debt and even entertain some sort of debt swap where they end up with even more Greek debt. I have heard it said by many experts that it is unrealistic to expect that lenders will get even a fraction of their principle back from these loans. So why loan more?

The key for me in understanding this is the book "Engineering the Financial Crisis". In that book, the authors presented the theory that the Basel capital accords, which set capital requirements for banks, had a lot to do with the last financial crisis. Specifically, the rules allowed bank investments in two types of securities to be counted at 100% towards their capital levels. Any other type of investment was severely discounted, so there were enormous incentives in the regulations to focus bank investments on these two types of securities. What were they? Sovereign debt and mortgages (and mortgage-backed securities).

In the authors' view, which I find persuasive, a lot of the last financial crisis was caused by these rules creating a huge artificial demand by banks for mortgage securities. This created a sort of monoculture that was susceptible to small contagions spreading rapidly. As this demand for mortgage backed securities inevitably drove down their returns, it also created a demand for higher-yielding, riskier mortgage investments that might still "count" as mortgage securities under the capital requirements.

Anyway, for the Greek crisis, we need to look at the other piece of these capital requirements that give 100% capital credit: sovereign debt. Now, I may have this wrong, but for Euro denominated credit, it all counts as 100% whether its German or Greek, which is a bit like saying a mortgage to Bill Gates and a mortgage to Clark Griswold's country cousins count the same, but those are the rules.

So here is the problem as I understand it: Greek debt, because of its risk, paid higher returns than other sovereign debt but still counted the same against capital requirements. So European banks loaded up on it. Now that the debt is clearly bad, I am sure they would love to get paid for it. But what they want even more is to continue to get credit for it on their balance sheets against capital requirements. So what the banks need more than getting paid is for the debt to still exist and to (nominally) be current so that they can still count it on their balance sheets. Otherwise, if the debt gets written off, that means banks need to run out and raise hundreds of billions in new capital to replace it.

Yes, I know this seems insane. If everyone knows that the debt is virtually worthless, isn't it a sham to keep taking expensive steps (like issuing even more new debt) just to make sure the debt still appears on the books at 100%? Yes, of course it is. This is a problem with just about every system ever tried on bank capital requirements. Such requirements make sense (even to this libertarian) in a world of deposit insurance and too big to fail, but they can and do create expensive unintended consequences.

A couple of news items landed in my inbox recently that aren’t directly related, but they’re both examples of the Vision of The Anointed at work.

I gave a brief summary of The Vision of The Anointed (as described by economist Thomas Sowell in a book by that name) in a speech I called Diet, Health and the Wisdom of Crowds. If you haven’t seen it, here’s a recap of how The Anointed (who are nearly always members of the intellectual class) operate:

The Anointed identify a problem in society

The Anointed propose a Grand Plan to fix the problem

Because they are so supremely confident in their ideas, The Anointed don’t bother with proof or evidence that the Grand Plan will actually work

If possible, The Anointed will impose the Grand Plan on other people (for their own good, of course)

The Anointed assume anyone who opposes the Grand Plan is either evil or stupid

If the Grand Plan fails, The Anointed will never, ever, ever admit the Grand Plan was wrong

The first news item that reminded me of The Anointed was about an (ahem) study that pinpoints the reason we have an obesity problem in modern America. Here are some quotes:

A new report puts some of the blame for Americans’ expanding waistlines on the growth of new Wal-Mart supercenters in the US.

Big box retailers, and Wal-Mart in particular, have made cheap, bulk-size junk foods more readily available, and Americans are eating more as a result, argues the report, which was published by the National Bureau of Economic Research.

“We live in an environment with increasingly cheap and readily available junk food,” Charles Courtemanche, an assistant professor of economics at Georgia State University and one of the report’s co-authors, told the Washington Post. “We buy in bulk. We tend to have more food around. It takes more and more discipline and self-control to not let that influence your weight.”

Well, there you have it. People are fat because there’s more food around. I remember asking my grandparents when I was a wee child, “Grandma, Grandpa … why aren’t you fat?” And my grandpa plopped me on his knee and rubbed my head and said, “Well, we would be if we could. But if you go look over there in the pantry, you’ll see we’re down to a few slices of bread and some carrots. It happens all the time because there’s no Wal-Mart nearby and we can only afford to eat just as much as we should.”

The researchers found higher rates of obesity in areas dense with supercenters, which have a larger selection of food and also offer other services, such as auto repair. Just one additional supercenter per 100,000 residents increases average body mass index in the area by 0.24 units and the obesity rate by 2.3% points, they found.

Riiiight. And since correlation proves causation, that means Wal-Mart is making people fat. It couldn’t be, say, the fact that low-income people are more likely to be fat for all kinds of reasons, and that Wal-Mart super-centers are built where their most loyal customers live.

Notice how nobody who blames obesity on lower food prices can explain why the wealthiest Americans also have the lowest rates of obesity? If it’s all about affordability, then wealthy people should be the fattest – they can eat whatever they want and as much as they want. But no, it’s only if we’re talking about poor people that we blame affordability – and thus Wal-Mart.

“These estimates imply that the proliferation of Wal-Mart Supercenters explains 10.5% of the rise in obesity since the late 1980s,” researchers wrote.

Uh-huh. And I’ll bet you all had no idea what to blame for obesity, then just stumbled across this data during a wide-open search for truth, then came to your astonishing conclusions.

Of course that’s not what happened. These bozos with PhDs went looking for a reason to blame Wal-Mart and – ta-da! – they found it. Intellectuals blaming Wal-Mart for the ills of society … now that is a shock.

In case you haven’t noticed, The Anointed are contemptuous of Wal-Mart and the people who shop there. This article in the Atlantic, written by a Brit, describes the snobbery rather nicely:

As a young man I aspired to live and work in the US because I wanted to be part of a thriving classless society. Of course that was naive. America is not a classless society. I’m not talking about the 1% and the 99%, and I’m not talking about mainstream America and the underclass (shocking though that gulf is). I’m talking about elite disdain for a much larger segment of the country. It’s a cultural thing: American snobbery.

Many of my American friends have an irrationally intense loathing of Wal-Mart, as though delivering bargains to the masses isn’t quite proper.

In America elite and demotic cultures aren’t merging, they are moving farther apart. The elite is ever more confident of its cultural superiority, and the demos, being American, refuses to be condescended to. I don’t think it’s economic pressure that causes much of the country to cling bitterly to guns and their religion, as Obama put it so memorably. It’s a quintessentially American refusal to be looked down on.

[The elite] may use a self-conscious rhetoric of non-judgmentalism – words like ‘inappropriate’ and ‘challenging’, or phrases such as ‘people in need of support’ and ‘people with issues’ – but they have no inhibitions about instructing others about what food they should eat, how they should bring up their children, or what forms of behaviour are healthy.

A few weeks ago, I was very much amused by the sight of anti-Wal-Mart protests in Manhattan — where there is no Wal-Mart, and where, if Bill de Blasio et al. have their way, there never will be. Why? Because we’re too enlightened to let our poor neighbors pay lower prices. The head-clutchingly expensive shops up on Fifth and Madison avenues? No protests.

Ironically, the anti-Wal-Mart crusaders want to make life worse for people who are literally counting pennies as they shop for necessities. Study after study has shown that Wal-Mart has meaningfully reduced prices: 3.1 percent overall, by one estimate — with a whopping 9.1 percent cut to the price of groceries. That comes to about $2,300 a year per household, savings that accrue overwhelmingly to people of modest incomes, not to celebrity activists and Ivy League social-justice crusaders.

And here’s a quote from Member of The Anointed Bill Maher explaining how Wal-Mart shoppers choose to vote:

Republicans need to stop saying Barack Obama is an elitist, or looks down on rural people, and just admit you don’t like him because of something he can’t help, something that’s a result of the way he was born. Admit it, you’re not voting for him because he’s smarter than you.

Uh, no, Bill, that’s not quite it. It’s more along the lines of something Milton Friedman once said: it’s not intelligent people who are the problem. The problem is people who are so impressed with their own intelligence, they feel qualified to tell others how to live.

Barack Obama can’t help it if he’s a magna cum laude Harvard grad and you’re a Wal-Mart shopper who resurfaces driveways with your brother-in-law.

Ahh, Bill, so that’s the reason. Wal-Mart shoppers resent smart people with Ivy League degrees. Strangely, many of those Wal-Mart shoppers later voted for Mitt Romney, who earned both a law degree and an MBA from Harvard.

Brilliant argument. Maher chides Republicans for saying Obama is an elitist who looks down on rural people, then makes it perfectly obvious that he, an Obama enthusiast, is an elitist who looks down on rural people. (I’m pretty sure he didn’t mean Wal-Mart shopper as a compliment.)

Gee, Bill, I would think someone with your towering intellect would recognize how thoroughly you just undermined your own argument. Of course The Anointed look down on rural people and Wal-Mart shoppers. And despite what you and your fellow left-wing snots think, the rural Wal-Mart shoppers are smart enough to know it.

That sneering attitude towards “Wal-Mart shoppers” is the reason I can’t stand Bill Maher. He’s a left-wing snot, and his live audience is full of left-wing snots who whoop and cheer at his snotty comments as a form of congratulating themselves for what they see as their superiority to people who shop at Wal-Mart and resurface driveways.

Even though I spent a chunk of my life as a comedian, I’ll be the first to say that if all the comedians disappeared, life would be less entertaining, but we’d be fine. If all the magna cum laude graduates from Harvard Law School disappeared, we’d also be fine, if not better off. But if all the people who know how to resurface driveways or otherwise build and repair stuff disappeared, we’d be screwed.

Anyway, you get the point. The Anointed view Wal-Mart shoppers as idiots. And since they’re idiots, the Wal-Mart shoppers are stuffing themselves and getting fat because – thanks to the low prices offered by the evil Wal-Mart – they can now afford to stuff themselves. I mean, it’s not as if any of them have actually tried to lose weight or anything.

So The Anointed see all these stupid Wal-Mart shoppers getting fat, which means The Anointed must come up with a Grand Plan to fix the problem – and of course, as The Anointed, they aren’t expected to provide any evidence that the plan would work.

The plan that came out in the media recently was proposed in 2010 by none other than Jonathan Gruber. If the name isn’t familiar, it should be. Gruber was once called “the architect” of ObamaCare by Democrats … until he embarrassed himself and the party by getting himself caught on video telling the truth about what it took to pass ObamaCare:

Yup, “the architect” was justifying lying to the public about what ObamaCare would actually do. The voters are stupid, ya see — one of the only two reasons anyone resists a Grand Plan proposed by The Anointed — so you have to lie to them to get a bill passed that’s really for their own good.

Gruber’s statements so perfectly captured the attitude of The Anointed, The Anointed in the Obama administration immediately tried to disown him.

On Friday, Bill Maher, host of HBO’s Real Time, brought up Jonathan Gruber, the economist who was an advisor and main architect on Obamacare and got caught crediting the “stupidity” of Americans to get the bill passed. Maher joked they were “soulmates” and likened his fellow Americans to dogs, and didn’t understand why anything Gruber said about the average American’s stupidity was considered controversial.

Maher’s audience applauded wildly, as they always do for their hero.

By the way, the subtitle of Sowell’s book is Self-Congratulation as a Basis for Social Policy. When Bill Maher agrees that you have to lie to the stupid voters to do what’s best for them and his audience of left-wing snots hoots and cheers in response, that’s a fine example of self-congratulation. They were probably high-fiving each other for not being stupid voters … you know, the kind who shop at Wal-Mart and resurface driveways and don’t understand that we need The Anointed to make important decisions for us … such as what kind of health insurance we’ll be allowed to buy.

Jonathan Gruber, long credited as the architect of ObamaCare, once discussed the necessity of taxing fat people by body weight in order to fight obesity.

“Ultimately, what may be needed to address the obesity problem are direct taxes on body weight,” Gruber wrote in an essay for the National Institute for Health Care Management in April 2010, just months after helping design ObamaCare with the president in the Oval Office and during the period in which he was under contract as an Obama administration consultant.

If I’ve said it once, I’ve said it at least twice: whenever The Anointed come up with a Grand Plan to fix a problem, it somehow always requires confiscating other people’s money or limiting their freedom to make their own decisions — or both, for a REALLY Grand Plan.

So there’s the mind of The Anointed at work: people are fat because Wal-Mart has made food too cheap. All those people who resurface driveways with their brother-in-law are overeating because they can afford to … and because they’re stupid and have no discipline. But if The Anointed impose direct taxes on bodyweight, the stupid driveway resurfacers will say to themselves, “Well, heck, I can’t afford those taxes! I’d better stop eating so much of this cheap Wal-Mart food and lose some weight.”

And then once again, The Anointed will have fixed society’s problems. All hail The Anointed.

I have mentioned a number of times my chicken or the egg arguments with Progressives on the solution to cronyism. Is the problem that government power exists to influence markets, and as long as it exists people will bid to control it? Or is it possible to wield massive make-or-break government power over industry rationally, and only the rank immorality and corrupt speech of corporations stands in the way. The former argues for a reduction in government power, the latter for more regulation of corporations and their ability to participate in the political process.

I believe this is an example in favor of the "power is inherently corrupting" argument. No corporation lobbied for NOx rules on diesel engines. They all fought it tooth and nail. But once these regulations existed, engine makers are all trying to use the laws to gut their competition:

In 1991, the EPA ignored complaints from several makers of non-road engines that rivals were cheating, in order to save fuel, on emissions rules for oxides of nitrous (NOx). Then environmental groups took up the same complaint, whereupon the agency demanded face-saving consent decrees with numerous engine makers, including two Volvo affiliates.

In essence, the engine makers apologized by agreeing in 1999 to accelerate by a single year compliance with a new emissions standard scheduled to take effect in 2006.

Meanwhile, with another NOx standard looming in 2010, Navistar sued the EPA claiming rival engine-makers were seeking to meet the rule with a defective technology. In turn, Navistar’s competitors sued claiming the EPA was unfairly favoring a defective technology pursued by Navistar (these are only the barest highlights of what became a truck-makers’ legal holy war).

While all this was going on, a Navistar joint-venture partner, Caterpillar, complained that 7,262 Volvo stationary engines made in Sweden before 2006 had violated the 1999 consent decree. Now let’s credit Caterpillar with a certain paperwork ingenuity: The Volvo engines were not imported to the U.S. and were made by a Volvo affiliate that wasn’t a party to the consent decree. EPA itself happily certified the engines under its then-current NOx standard, only changing its mind four years later, prodded by a competitor with a clear interest in damaging Volvo’s business.

To complete the parody, a federal district court would later agree that the 1999 consent terms “do not clearly apply” to the engines in question, but upheld an EPA penalty anyway because Volvo otherwise might enjoy a “competitive advantage” against engines to which the consent decree applied.

As a side note, this is from the "oops, nevermind" Emily Litella School of Regulation:

Let it be said that the EPA’s NOx regulation must have done some good for the American people, though how much good is hard to know. The EPA relies on dubious extrapolations to estimate the benefits to public health. What’s more, the agency appears to have stopped publishing estimates of NOx pollution after 2005. Maybe that’s because the EPA’s focus has shifted to climate change, and its NOx regulations actually increase greenhouse emissions by increasing fuel burn.

Why the transfer of decisions from those with personal experience and a stake in the outcome to those with neither can be expected to lead to better decisions is a question seldom asked, much less answered.

A woman attempted to rob a bar in La Crosse,
Wisconsin, but was thwarted by a customer with a taser. The police
are making sure justice is served and have arrested the woman.

They arrested the man with the taser, too. That's because it's
against the law in Wisconsin to carry a taser without a permit.

The incident took place in the early morning hours at King's
Korner bar. A former employee pointed a gun at the bartender and
demanded the money in the cash register. But customer Jeff Steele
brandished his taser at the burglar, and she ran off. She was
apprehended shortly thereafter.

Steele didn't actually use the taser, according to the batender.
Still, he will face a felony weapons charge,
according to WKBT:

Steele is being charged with possession of an electronic weapon,
which is a felony, because he doesn't have a concealed carry permit
for his Taser.

"You can have it in your home and on your private property
without a concealed carry permit, but you do need to keep a
concealed carry permit to carry it out in public," said Officer
Lisa Barrix, with the La Crosse Police Department.

"When I bought it off the Internet it said basically that it's
legal to have in the state of Wisconsin, but didn't go into any
depth on it, so I assumed that it was legal to carry around,
otherwise why would you buy one to leave it at home? How is it for
defense then?" Steele said.

Barrix says because Steele tried help he wasn't immediately
taken to jail.

What a great message—exercise your Constitutional rights and
defend someone from a potentially violent crime and you won't be
taken to jail immediately.

For his part, Steele claims he ordered the taser online and
didn't know he was only allowed to keep it in his home. He lives in
a rough neighborhood, and if he can't leave his house with the
taser in tow, it defeats the entire purpose.

I hope he learned his lesson. About helping people. And
protecting himself.

The Washington Post's Radley Balko has
updates on the 2012 killing of 24-year-old Seth Adams by
Michael Custer, a Palm Beach county sheriff's deputy, which was
ruled justified after the county sheriff, Ric Bradshaw, said
that investigation would "verify exactly what I thought from the
beginning."

The attorney for the Adams family says he's found
new evidence in the shooting: a police witness who said the
interaction was "peaceful" just 90 seconds before the shooting
(appearing to contradict Custer's claim that Adams was belligerent
from the beginning, when he found the undercover cop lurking in the
parking lot of his family business late at night), a blood trail
beginning behind the Adams' truck (suggesting he wasn't shot while
reaching for something on the driver's side, as Custer claimed),
and a review that found Custer had "difficulty assessing critical
incidents and making sound decisions under pressure," a review
state investigators were not given.

There are more questions here. Why isn't the state's
attorney's office investigating the sheriff's department for
reportedly lying about the existence of Custer's employee
evaluations? And why did FDLE investigators take the department at
its word that those evaluations didn't exist? An
investigator for the Adams family was able to obtain them through
an open-records request. Shouldn't a state agency charged with
investigating police shootings be a bit more skeptical of the
targets of its investigations?

Worse, the state's attorney, a new one, will only consider new
evidence if it's presented by a law enforcement agency. As Balko
points out:

No matter how compelling new evidence uncovered by attorneys for
the Adams family may be, Aronberg won't consider it. It must come
from one of the law enforcement agencies involved. That is, either
the sheriff's department for whom Custer worked, which promoted
Custer despite serious questions about his temperament and
decision-making, whose sheriff has supported Custer from the start,
and which failed to turn over Custer's personnel files . . . or the
state agency that failed to uncover all of these things during its
own investigation.

Lawmakers in
at least 12 states are proposing different kinds of bills aimed
at police reform—40 in Missouri alone. In Florida, a bill proposed
by two state legislators, Democrats Shevrin Jones and Alan
Williams, would
mandate patrol officers use body cameras and exempt such use
from wiretapping laws.

More than 1,000 people spend their workdays in an industrial park housed in an excavated mine the size of 140 football fields.As Bloomberg reports, the underground industrial park known as SubTroplis opened for business in 1964 in an excavated mine below Kansas City, Mo. attracting tenants with the lure of lower energy costs and cheap rents...

About 10 percent of Kansas City's commercial real estate is underground, says Ora Reynolds, president of SubTropolis landlord Hunt Midwest. Landlords have made a cottage industry out of underground industrial space, thanks to rock formations near the Missouri River that allow trucks to drive into the old mines instead of tenants needing to use elevators to get things in and out.

Industrial chic: Subtropolis boasts 17-foot-high ceilings supported by rough-hewn columns. The 270-million-year-old limestone deposits are six times stronger than concrete, according to Hunt Midwest's marketing materials.

Subtropolis's cool climate helped attract cloud computing company LightEdge, which has become the anchor tenant in what Hunt Midwest hopes will develop into a major data center.

The U.S. Postal Service uses Subtropolis as a distribution hub for postage stamps, storing hundreds of millions of stamps in the facility.

The USPS rents more than 500,000 square feet at SubTropolis.

The National Archives and Records Association keeps old tax records and federal court documents at the facility. Pick a fight with the Internal Revenue Service and the paper trail may lead to these shelves.

Vanguard Packaging prints retail packaging and supermarket displays in its 500,000-square-foot space. Vanguard calls itself the most sustainable packaging company in North America.

Journey to the center of the earth—or at least, to EarthWorks, an educational program that schools students on the Midwest's natural habitats in a 32,000 square-foot space in SubTropolis.

Some cannisters in this archive hold the original film from Gone with the Wind.

"I have no idea how many pounds of coffee I have down here," says Joe Paris, vice president at Paris Brothers, a specialty foods company. "I have thousands of bags. Some of them are 60 or 70 kilos. It's a lot."

SubTropolis is down the road from an assembly plant at which Ford manufactures F150 pickups. This has attracted companies such as Knapheide, shown here, which manufactures steel bodies that get rigged onto Ford trucks.

One tenant in SubTropolis's Automotive Alley is Ground Effects, which provides a variety of conversion services.

Road runners have been competing in 5-kilometer and 10k races inside SubTropolis's seven miles of roadways for 33 years.

After debating people online for years on issues from catastrophic man-made climate change to genetically-modified crops to common chemical hazards (e.g. BPA) to vaccination, I wanted to offer a couple quick thoughts on the common mistakes I see in evaluating risks.

1. Poor Understanding of Risk, and of Studies that Evaluate Risk

First, people are really bad at thinking about incremental risk above and beyond the background risk (e.g. not looking at "what is my risk of cancer" but "what is my incremental added risk from being exposed to X"). Frequently those incremental risks are tiny and hard to pick out of the background risk at any level of confidence. They also tend to be small compared to everyday risks on which people seldom focus. You have a far higher - almost two orders of magnitude - risk in the US of drowning in your own bathtub than you have in being subject to terrorism, but which do we obsess over?

Further, there are a lot of folks who seem all-to-ready to shoot off in a panic over any one scary study in the media. And the media loves this, because it drives the meter on their earnings, so they bend over backwards to look for studies with scary results and then make them sound even scarier. "Tater-tots Increase Risk of Ebola!" But in reality, most of these scary studies never get replicated and turn out to be mistaken. Why does this happen?

The problem is that every natural process is subject to random variation. Even without changing the conditions of an experiment, there is going to be random variation in measurements. For example, one population of white mice might have 6 cancers, but the next might have 12 and the next might have zero, all from natural variation. So the challenge of most experiments is to determine whether the thing one is testing (e.g. exposure to a particular substance) is actually changing the measurements in a population, or whether that change is simply the result of random variation. That is what the 95% confidence interval (that Naomi Oreskes wants to get rid of) really means. It means there is only a 5% chance that the results measured were due to natural variation.

This is a useful test, but I hope you can see how it can fail. Something like 5% of the time that one is measuring two things that actually are uncorrelated, the test is going to give you a false positive. Let's say in a year that the world does 1000 studies to test links that don't actually exist. Just from natural variation, 5% of these studies will still seem to show a link at the 95% confidence level. We will have 50 studies that year broadcasting false links. The media will proceed to scare the crap out of you over these 50 things.

I have never seen this explained better than in this XKCD cartoon (click to enlarge):

All of this is just exacerbated when there is fraud involved, an unfortunate but not unknown occurrence when reputations and large academic grants are on the line. This is why replication of the experiment is important. Do the study a second time, and all but 2-3 of these 50 "false positive" studies will fail to replicate the original results. Do it three times, and all will likely fail to replicate. This, for example, is exactly what happened with the vaccine-autism link -- it came out in one study with a really small population and some evidence of fraud, and was never replicated.

2. The Precautionary Principle vs. the Unseen, with a Dollop of Privilege Thrown In

When pressed to the wall too hard about the size and quality of the risk assessment, most folks subject to these panics will fall back on the "precautionary principle". I am not a big fan of the precautionary principle, so I will let Wikipedia define it so I don't create a straw man:

The precautionary principle or precautionary approach to risk management states that if an action or policy has a suspected risk of causing harm to the public or to the environment, in the absence of scientific consensus that the action or policy is not harmful, the burden of proof that it is not harmful falls on those taking an action.

I will observe that as written, this principle is inherently anti-progress. The proposition requires that folks who want to introduce new innovations must prove a negative, and it is very hard to prove a negative -- how do I prove there are no invisible aliens in my closet who may come out and eat me someday, and how can I possibly get a scientific consensus to this fact? As a result, by merely expressing that one "suspects" a risk (note there is no need listed for proof or justification of this suspicion), any advance may be stopped cold. Had we followed such a principle consistently, we would still all be subsistence farmers, vassals to our feudal lord.

One other quick note before I proceed, it turns out that proponents of the precautionary principle are very selective as to where they apply the principle. They feel like it absolutely must be applied to fossil fuel burning, or BPA use, or GMO's. But precautionary principle supporters never apply it in turn to, say, major new government programs and regulations and economic interventions, despite many historically justified concerns about the risks of these programs.

But neither of these is necessarily the biggest problem with the precautionary principle. The real problem is that it focuses on only one side of the equation -- it says that risks alone justify stopping any action or policy without any reference at all to benefits of that policy or opportunity costs of its avoidance. A way of restating the precautionary principle is, "when faced with risks and benefits of a certain proposal, look only at the risks."

Since the precautionary principle really hit the mainstream with the climate change debate, I will use that as an example. Contrary to media appellations of being a "denier," most science-based climate skeptics like myself accept that man is adding to greenhouse gasses in the atmosphere and that those gasses have an incremental warming effect on the planet. What we deny is the catastrophe -- we believe we have good evidence that catastrophic forecasts from computer models are exaggerating future warming, and greatly exaggerating resulting forecast climate changes. Whenever I am fairly successful making this argument, the inevitable rejoinder is "well, the precautionary principle says that if we have even a small percentage chance that burning fossil fuels will lead to a climate disaster, then we have to limit their use immediately".

The problem with this statement is that it assumes there is no harm or risk to reducing fossil fuel use. But fossil fuel use pays enormous benefits to everyone in the world. Even if we could find near substitutes that don't create CO2 emissions (and it is every much open to debate if such substitutes currently exist), these substitutes tend to be much more expensive and much more infrastructure-intensive than are fossil fuels. The negative impact to the economy would be substantial. One could argue that one particular impact -- climate or economy -- outweighs the other, but it is outright fraud to refuse to discuss the trade-off altogether. Particularly since catastrophic climate change may only be a low-percentage risk while economic dislocation from reduction in fossil fuel use is a near certainty.

My sense is that if the United States chose to cut way back on fossil fuel use in a concerted effort, we could manage it and survive the costs. But that is because we are a uniquely rich nation. I am not sure anyone in this country understands how rich. I am not talking just about Warren Buffet. Even the poorest countries have a few rich people at the top. I am talking about everybody. Our poorest 20% would actually be among the richest quintile in many nations of the world. A worldwide effort to eliminate fossil fuel use or to substantially raise its costs or to force shifts to higher cost, less easily-used alternatives would simply devastate many developing nations, which need every erg their limited resources can get their hands on. We are at a unique moment in history when more than a billion people are in the process of emerging from poverty around the world, progress that would be stopped in its tracks by a concerted effort to limit CO2 output. Why doesn't the precautionary principle apply to actions that affect their lives?

College kids have developed a popular rejoinder they use in arguments that states "check your privilege." I thought at first it was an interesting phrase. I used it in arguments a few times about third world "sweat shops". I argued that those who wanted to close down the Nike factory paying $1 an hour in China needed to check their privilege -- they had no idea what alternatives those Chinese who took the Nike jobs were facing. Yes, you middle class Americans would never take that job, but what if your alternative was 12 hours a day in a rice paddy somewhere that barely brought in enough food for your family to subsist? Only later, I learned that "check your privilege" didn't mean what I thought it meant, and in fact in actual academic use it instead means "shut up, white guy." In a way, though, this use is consistent with how the precautionary principle is often used -- in many of my arguments, "precautionary principle" is another way of saying "stop talking about the costs and trade-offs of what I am proposing."

Perhaps the best example of the damage that can be wrought by a combination of Western middle class privilege and the precautionary principle is the case of golden rice. According to the World Health Organization between 250,000 to 500,000 children become blind every year due to vitamin A deficiency, half of whom die within a year of becoming blind. Millions of other people suffer from various debilitating conditions due to the lack of this essential nutrient. Golden Rice is a genetically modified form of rice that, unlike conventional rice, contains beta-Carotene in the rice kernel, which is converted to vitamin A in humans.

By 2002, Golden Rice was technically ready to go. Animal testing had found no health risks. Syngenta, which had figured out how to insert the Vitamin A–producing gene from carrots into rice, had handed all financial interests over to a non-profit organization, so there would be no resistance to the life-saving technology from GMO opponents who resist genetic modification because big biotech companies profit from it. Except for the regulatory approval process, Golden Rice was ready to start saving millions of lives and preventing tens of millions of cases of blindness in people around the world who suffer from Vitamin A deficiency.

Seems like a great idea. Too bad its going nowhere, due to fierce opposition on the Left (particularly from Greenpeace) to hypothetical dangers from GMO's

It’s still not in use anywhere, however, because of the opposition to GM technology. Now two agricultural economists, one from the Technical University of Munich, the other from the University of California, Berkeley, have quantified the price of that opposition, in human health, and the numbers are truly frightening.

Their study, published in the journalEnvironment and Development Economics, estimates that the delayed application of Golden Rice in India alone has cost 1,424,000 life years since 2002. That odd sounding metric – not just lives but ‘life years’ – accounts not only for those who died, but also for the blindness and other health disabilities that Vitamin A deficiency causes. The majority of those who went blind or died because they did not have access to Golden Rice were children.

Note this is exactly the sort of risk tradeoff the precautionary principle is meant to ignore. The real situation is that a vague risk of unspecified and unproven problems with GMO's (which are typically driven more by a distrust on the Left of the for-profit corporations that produce GMO's rather than any good science) should be balanced with absolute certainty of people dying and going blind. But the Greenpeace folks will just shout that because of the "precautionary principle", only the vague unproven risks should be considered and thus golden rice should be banned.

Risk and Post-Modernism

A few weeks ago, I wrote about Naomi Oreskes and the post-modern approach to science, where facts and proof take a back-seat to political narratives and the feelings and intuition of various social groups. I hadn't really thought much about this post-modernist approach in the context of risk assessment, but I was struck by this comment by David Ropeik, who blogs for Scientific American.

The whole GMO issue is really just one example of a far more profound threat to your health and mine. The perception of risk is inescapably subjective, a matter of not just the facts, but how we feel about those facts. As pioneering risk perception psychologist Paul Slovic has said, “risk is a feeling.” So societal arguments over risk issues like Golden Rice and GMOs, or guns or climate change or vaccines, are not mostly about the evidence, though we wield the facts as our weapons. They are mostly about how we feel, and our values, and which group’s values win, not what will objectively do the most people the most good. That’s a dumb and dangerous way to make public risk management decisions.

Mr. Ropeik actually disagrees with me on the risk/harm tradeoffs of climate change (he obviously thinks the harms outweigh the costs of prevention -- I will give him the benefit of the doubt that he has actually thought about both sides of the equation). Fine. I would be thrilled for once to have a discussion with someone about climate change when we are really talking about costs and benefits on both sides of the equation (action and inaction). Unfortunately that is all too rare.

Postscript: To the extent the average person remembers Bjorn Lomborg at all, they could be excused for assuming he is some crazed right-wing climate denier, given how he was treated in the media. In fact, Lomborg is very much a global warming believer. He takes funding from Right-ish organizations now, but that is only because he has been disavowed by the Left, which was his original home.

What he did was write a book in which he looked at a number of environmental problems -- both their risks and costs as well as their potential mitigation costs -- and he ranked them on bang for the buck: Where can we get the most environmental benefit and help the most people for the least investment. The book talked about what he thought were the very real dangers of climate change, but it turned out climate change was way down this ranked list in terms of benefits vs. costs of solutions.

This is a point I have made before. Why are we spending so much time, for example, harping on China to reduce CO2 when their air is poisonous? We know how to have a modern technological economy and still have air without soot. It is more uncertain if we can have a modern technological economy, yet, without CO2 production. Lomborg thought about just this sort of thing, and made the kind of policy risk-reward tradeoffs based on scientific analysis that we would hope our policy makers were pursuing. It was exactly the kind of analysis that Ropeik was advocating for above.

Lomborg must have expected that his work would be embraced by the environmental Left. After all, it was scientific, it achnowleged the existence of a number of environmental issues that needed to be solved, and it advocated for a strong government-backed effort led by smart technocrats doing rational prioritizations. But Lomborg was absolutely demonized by just about everyone in the environmental community and on the Left in general. He was universally trashed. He was called a climate denier when in fact he was no such thing -- he just pointed out that man-made climate change was way harder to solve than other equally harmful environmental issues. Didn't he get the memo that the narrative was that global warming was the #1 environmental threat? How dare he suggest a re-prioritization!

Lomborg's prioritization may well have been wrong, but no one was actually sitting down to make that case. He was simply demonized from day one for getting the "wrong" answer, defined as the answer not fitting the preferred narrative. We are a long, long way from any reasonable ability to assess and act on risks.

In 1962, immediately preceding the licensure of the first measles vaccines in the United States, when measles was a nearly universal disease, Alexander Langmuir described the medical importance of measles to the country and put forth the challenge of measles eradication. Although most patients recovered without permanent sequelae, the high number of cases each year made measles a significant cause of serious morbidity and mortality Langmuir showed that >90% of Americans were infected with the measles virus by age 15 years. This equated to roughly 1 birth cohort (4 million people) infected with measles each year. Not all cases were reported to the public health system; from 1956 to 1960, an average of 542,000 cases were reported annually. By the late 1950s, even before the introduction of measles vaccine, measles-related deaths and case fatality rates in the United States had decreased markedly, presumably as a result of improvement in health care and nutrition. From 1956 to 1960, an average of 450 measles-related deaths were reported each year (∼1 death/ 1000 reported cases), compared with an average of 5300 measles-related deaths during 1912–1916 (26 deaths/ 1000 reported cases).

Note that even in the ABSOLUTE WORST CASE, which is a completely unvaccinated scenario with 90 percent infection rates that assumes absolutely no improvement in health care in 55 years, we're talking about 450 deaths per year. Realistically, we're probably talking around 200, given the advancements in medical technology. THAT is what all the pro-vaccine scaremongers are going on about. Americans would do better to ban bicycles, as they would save three times more lives per year.

The pro-vaccine propaganda is just more creeping totalitarianism, albeit one of bizarre appeal to the supposedly conservative and libertarian right. But it cannot be rationally defended on any material grounds, nor balanced against its infringements on personal liberties and human rights.

The Ecuadoran government is
using U.S. law to
silence its critics. The government is filing complaints under
the Digital Millennium Copyright Act, claiming copyright violations
against videos and posts critical of the government. Websites
hosting the material automatically take it down. Those who posted
the material are generally able to get it reinstated, but that
takes time and effort.

Challenging an agency’s assessment of scientific research in court is typically seen as a fool’s errand. The courts may keep the regulatory state on a close leash where matters of constitutional law are concerned, and will give challenges regarding the proper interpretation of statutes a fair hearing before (usually) deferring to the government’s view. But an agency has to go seriously off the rails before the courts will second-guess its assessment of the scientific record underlying a regulation.

That’s what makes EPA’s super-expensive Mercury and Air Toxics Standards (MATS) rule so interesting: the agency’s own assessment of the scientific research shows there was no good reason to regulate in the first place. The Supreme Court is now reviewing EPA’s decision to plow ahead regardless, irrespective of the costs of doing so.

Power plants emit trace amounts of mercury, and mercury poses a risk to human neurological development when pregnant women consume fish tainted by it. But, as EPA has explained, mercury deposition in the United States “is generally dominated by sources other than U.S. [power plants].” In fact, the agency’s figures show that those plants are responsible for only about one half of one percent of airborne mercury.

Common sense would therefore suggest that reducing or even eliminating emissions from U.S. plants could have little or no appreciable effect on public health. And EPA actually agrees, finding that “even substantial reductions in U.S. [power-plant] deposition…[are] unlikely to substantially affect total risk.”

To escape that seemingly inescapable conclusion, the agency had to assume the existence of “women of child-bearing age in subsistence fishing populations who consume freshwater fish that they or their family caught” in enormous quantities. And not just any fish, but the most contaminated fish. And even then, placing its thumb on the scale at every step of the way, EPA still struggled to find any real risk, ultimately concluding that mercury from domestic power plants might cause the hypothetical children of these hypothetical women to suffer a hypothetical loss of 0.00209 IQ points apiece—an amount that cannot be meaningfully distinguished from zero.

Why would EPA go through all this trouble to contrive a risk worthy of regulation, while ignoring costs that the agency projects to hit $10 billion per year? The answer is that EPA has long wanted to comprehensively regulate power plants but (due to the cooperative-federalism structure of the Clean Air Act) has been forced to defer to the states on whether and how to address individual sources. Minimizing Section 112’s “appropriate and necessary” requirement allows EPA to circumvent the statutory limitations on its authority and directly achieve its intended goal: imposing new requirements on power plants.

So what seems like a complicated statutory case actually boils down to a familiar story: a federal agency twisting statutory language to aggrandize its own power at the expense of the states’. The Supreme Court can take EPA’s evaluation of the science at face value and still reject this power-grab.